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1.c ME Class 2- 2024/2025 > Chapter 9 - > Flashcards

Chapter 9 - Flashcards

1
Q

Define unemployment rate

A

The percentage of the labor force that is unemployed.

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2
Q

What is the unemployment rate calcuation

A

UnemploymentRate=
(NumberofUnemployed / Labour force) x 100
​

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3
Q

Define labour force participation rate

A

The percentage of the adult population that is in the labor force.

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4
Q

What is the labour force participation rate formula

A

(Labour force / adult population )x 100

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5
Q

What is the natural rate of unemployment

A

The normal rate of unemployment around which the unemployment rate fluctuates.

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6
Q

What are the components of the natural rate of unemployment

A

Structural unemployment and frictional unemployment.

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7
Q

What is cyclical unemployment

A

The deviation of unemployment from its natural rate, associated with business cycles.

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8
Q

What are the types of unemployment

A
  1. Frictional unemployment
  2. Structural Unemployment
  3. Cyclical unemployment
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9
Q

Define frictional unemployment

A

Short-term unemployment that occurs when people are between jobs or are entering the labor market for the first time.

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10
Q

What is the cause of frictional unemployment

A

job search time, geographic mobility, industry changes

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11
Q

Provide an example of frictional unemployment

A

A recent college graduate looking for their first job.

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12
Q

Define structural unemployment

A

Long-term unemployment that occurs when there is a mismatch between the skills of workers and the requirements of jobs.

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13
Q

What are the causes of structural unemployment

A

Technological changes, globalization, changes in consumer demand.

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14
Q

Provide an example of structural unemploymnet

A

Factory workers losing jobs due to automation.

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15
Q

Define cyclical unemployment

A

Unemployment that rises during economic downturns and falls when the economy improves.

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16
Q

What is the cause of cyclical unemployment

A

fluctuations in economic activity

17
Q

what is an example of cyclical unemployment

A

increased unemployment during a recession

18
Q

What ways do you measure unemployment

A
  1. labour force
  2. unemployment surveys
  3. discouraged workers
19
Q

define labour force

A

The total number of workers, including both the employed and the unemployed.

20
Q

What are the exclusions to the labour force

A

Retired individuals, full-time students, homemakers, discouraged workers.

21
Q

What survey is used for unemployment and provide a definition

A

Current Population Survey (CPS): A monthly survey conducted by Statistics Canada to measure employment, unemployment, and labor force participation.

22
Q

What is meant by discouraged workers

A

Individuals who would like to work but have given up looking for a job due to poor prospects.

23
Q

What are the factors that affect the natural rate of unemployment

A
  1. job search
  2. minimum wage laws
  3. unions and collective barganing
  4. efficiency wages
    5.
24
Q

Why is job search a factor that affects the natural rate of unemployment

A

Time and effort required to match workers with appropriate jobs.

25
Q

Define minimum wage laws

A

Setting a minimum wage can lead to higher unemployment if it is above the equilibrium wage level.

26
Q

Define unions and collective barganing

A

Can lead to higher wages and lower employment in unionized sectors.

27
Q

Define Efficiency wages

A

Employers may pay above-equilibrium wages to increase productivity, reduce turnover, and attract better applicants, potentially increasing unemployment.

28
Q

What are the policies to reduce unemployment

A
  1. job training programs
  2. unemployment insurance
  3. job search assistance
29
Q

define job training programs

A

Government programs to help workers acquire skills needed in the current job market.

30
Q

Define unemployment insurance

A

Provides temporary financial assistance to unemployed workers, which can reduce the urgency of finding new employment but also support consumer spending.

31
Q

Define job search assistance

A

Services to help match job seekers with employers, reducing frictional unemployment.

32
Q

How does the impact of technological change affect unemployment

A

Technological advancements can increase structural unemployment as certain skills become obsolete.

33
Q

How does globalization affect unemployment

A

Global competition can lead to job losses in certain industries but can also create jobs in other sectors.

34
Q

How do economic policies affect unemployment

A

Expansionary fiscal and monetary policies can reduce cyclical unemployment during economic downturns.

35
Q
A

1.c ME Class 2- 2024/2025 (10 decks)

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